LexSECURITIES AND EXCHANGE BOARD OF INDIA versus M/S. INFORMETICS VALUATION AND RATING PVT. LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
B
[2013] 3 S.C.R. 426
SECURITIES AND EXCHANGE BOARD OF INDIA
v.
M/S. INFORMETICS VALUATION AND RATING PVT. LTD.
(Civil Appeal No. 291 of 2012)
FEBRUARY 19, 2013
[SURINDER SINGH NIJJAR AND M.Y. EQBAL, JJ.]
Securities and Exchange Board of India (Credit Rating
Agencies) Regulations, 1999 - Regulations 3, 4(e), 6, 7 and
C First Schedule Form A - Application under Regulation 3 by
company, to Securities and Exchange Board of India (SEBI)
seeking registration as a Credit Rating Agency (CRA) - SEBI
required the company to furnish complete details of its
promoters, confirm the status of their eligibility under
D Regulation 4(e) (i.e. they have continuous net worth of
minimum Rs. 100 crores as per its Audited Annual Accounts
for the previous five years prior to filing of the application
under Regulation 3), and to offer comments on a discrepancy
noted in the promoter's net worth certificate etc - The company
E submitted the net worth certificate of its promoter which was
issued on the basis of the certificate provided by their Bankers
- SEBI further directed the company to produce accounts of
its promoter for another two years after the date of application
- On the Company's failure to produce two years account,
F rejected the application under Regulation 3 - Appeal - SAT
allowed appeal of the Company and remitted the matter to
SEBI to consider the application without requiring the
company to produce the accounts for the two years after filing
of the application - Appeal by SEBI - Held: The information
G sought by SEBI with regard to additional two years was beyond
the scope of the Regulations and Form A, hence without
jurisdiction - However, SEBI was within its power to ask for the
Audited Accounts for the five years preceding the date of
application - The Net Worth Certificate for five years did not
H
426
SEC. AND EXCH. BOARD OF INDIA v. INFORMETICS
427
VALUATION AND RATING P. LTD.
conform to the provisions contained in the regulation 4(e) as
A
the certificate did not categorically state that it was based on
the audited account - Therefore, under Regulation 6, it was
duty of SEBI to have rejected the application - SEBI delayed
the rejection of the application by granting time to remove the
objections even beyond the permissible time - The company s
taking advantage of the liberty, provided.the audited accounts
for the five years preceding the date of application - It has also
produced the audited accounts for the subsequent two years
- Since SEBI extended the time, the impugned order, not
modified - Appeal dismissed - Securities and Exchange c
Board of India Act, 1992.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 291
of 2012.
From the Judgment & Order dated 09.11.2011 of the
D
Securities Appellate Tribunal, Mumbai, in Appeal No. 155 of
2011.
Chander Uday Singh, Pratap Venugopal, Gaurav Nair (for
K.J. John) for the Appellant.
R.S. Suri, Chirag M. Shroff, Amrita Singh, Narinder Kr.
Goyal for the Respondent.
The Order of the Court was delivered by
E
F
SURINDER SINGH NIJJAR, J. 1. The present appeal
under Section 15Z of the Securities and Exchange Board of
India Act, 1992 ("the SEBI Act") is directed against the
impugned judgment and final order dated 9th November, 2011
passed by the Securities Appellate Tribunal, Mumbai ("the
G
SAT"), in Appeal No. 155 of 2011, by which the appeal filed
by M/s lnformetics Valuation and Rating Pvt. Ltd., (the
respondent herein) was allowed, and the order dated 24th June,
2011 passed by the Whole Time Member of SEBI and
communication dated 21st July, 2011 of the Securities and
H
428
SUPREME COURT REPORTS
[2013] 3 S.C.R.
A Exchange Board of India ("the SEBI") was set aside. By the
impugned order, the SAT has remanded the matter back to the
appellant to consider the application of the respondent seeking
registration as a Credit Rating Agency ("CRA") without
requiring the respondent to produce Audited Annual Accounts
B of the respondent's promoters for the two years ending
December, 2010.
c
2. We may notice here the skeletal facts which are
necessary for the determination of the limited legal issue
involved in this appeal.
3. On 11th June, 2009, the respondent submitted an
application to SEBI under Regulation 3 of the Securities and
Exchange Board of India (Credit Rating Agencies) Regulations,
1999 ("the CRA Regulations, 1999") seeking registration as a
D CRA. The respondent company was incorporateExcerpt shown. Read the full judgment & AI analysis in Lexace.